#PLF2024: For a budget to match our ecological and social ambitions

The government's main objective for this Budget Bill is clear: to reduce public debt. Impact France calls for this debt reduction logic to be combined with the imperative of ecological and social transition of the economy.

The French government recently took the first steps in this direction. The bill on value sharing aims to enable very small businesses to take advantage of existing bonus mechanisms. The announcement of €10 billion in green investments and the elimination of brown niches is a positive signal. Impact France calls for these impulses and the logic of planning to be given their full force, by adopting more systemic mechanisms in favor of business transformation.

Modulate the corporate tax rate according to the allocation of profits

Why?

• The aftermath of the health crisis, followed by pressure on energy and consumer goods prices, has accelerated the imbalance in the sharing of value between shareholders, employees, consumers and the investments needed for the ecological and social transition.
• In 2022, CAC 40 profits and dividend payouts reached record levels: €152 billion in cumulative net income and an estimated €80.2 billion in dividends and share buybacks. Over a broader period (2009-2018), dividend payouts at these companies have risen by 70%, while salaries have increased by less than 20%. In 2021, the average payout ratio will reach 64%, and 98% including share buybacks (55% in 2022, including share buybacks). At the same time, public and private financing requirements to achieve carbon neutrality have been estimated at €66 billion per year by 2030.
• This gap, coupled with the inflationary context, makes "price rises" and "higher wages and purchasing power" the second and third most important issues for the French.

How?

• Introduce a higher rate, compared with the current standard rate, for the portion of profits distributed to shareholders, and a reduction in the current standard rate for profits reinvested in the company or distributed to employees.
• The level of the rate reduction should enable the State to collect a constant amount.
• More broadly, Mouvement Impact France advocates greater use of behavioral taxation applied to companies, and calls on public authorities to carry out in-depth work in this direction.

Extend the review of "Young Innovative Companies" status to young impact companies

Why?

• The "Jeunes entreprises innovantes" (JEI) and "Jeunes entreprises universitaires" (JEU) statuses are set to evolve in line with the report by MP Paul Midy. It is proposed to create a status of "Jeunes Entreprises d'Innovation et de Croissance" (JEIC), intended for companies "meeting the criteria of capacity for innovation and/or strong growth".
• The Mouvement Impact France advocates the recognition of innovations other than those that are disruptive and hyper-profitable. Innovative activities with an ecological and social impact carried out by SSE start-ups must be supported: this is a matter of sound management of public finances, since their positive impact helps to avoid major ecological and social costs for public authorities.

How?

• Make the future "Jeunes Entreprises d'Innovation et de Croissance" (JEIC) scheme accessible to SSE start-ups.
• This insertion would have a limited cost (around €9.5 million) compared with the cost of the current (€263 million) and future scheme. It would also enable the development of some 250 young commercial enterprises in the SSE sector (more than 4,000 enterprises are currently covered by the JEIC status).

Making CVAE reductions conditional on companies meeting their environmental obligations

Why?

• France's "rate of gross emissions reduction must almost double to meet the targets of the Fit for 55 legislative package by 2030". Businesses will be responsible for half of the effort required to reach this target. A technical prerequisite is the widespread introduction of carbon trajectories, essential steering tools for successful planning.
• Cross-compliance is already partially used

👉Companies benefiting from the stimulus plan are required to publish a balance sheet of their greenhouse gas emissions (simplified balance sheet for those with more than 50 employees).

👉Some public bodies (BPI France) and regions (Occitanie) condition part of their aid to companies.

• 86% of French people believe that public aid "should be granted to companies, but with environmental and social counterparts". In addition, over 80% believe that big business and the State have the capacity to "make progress in the fight against global warming".

How?

• Make the CVAE rebate available to companies with over 500 employees conditional on compliance with the obligation to publish a BEGES (greenhouse gas emissions balance sheet) and a trajectory for reducing these emissions.
• This obligation has been in place since 2012 for companies with over 500 employees. However, only 43% of them (3,106 companies subject to this obligation by the end of 2021) have implemented it. It is therefore a question of applying an obligation created more than a decade ago.
• The impact on public finances would be positive, since the €1 billion reduction in CVAE planned for the PLF 2024 would only apply to companies complying with their legal obligation.
• The effort would be borne by companies with more than 500 employees, with sufficient resources to carry out a BEGES. It should also be borne in mind that ETIs and large companies currently benefit from 68% of the CVAE reduction.

Make the granting of the research tax credit (crédit d'impôt recherche - CIR) and aid from Bpifrance, particularly under the France 2030 plan, conditional on companies meeting their ecological obligations.

Why?

• The CIR is the main measure used to support R&D investment by companies, and no ecological or social impact criteria are taken into account when granting it. Its effectiveness has also been called into question: low cost/effectiveness ratio for public finances, low contribution to ecological transition and sometimes abusive use by certain companies. In 2023, the CIR represented around €7 billion for 20,000 beneficiary companies. Most of the receivables go to ETIs and large companies.
• 2.3 billion in aid from Bpifrance is conditional on the publication of a BEGES and a decarbonization trajectory.
• The France 2030 plan aims to catch up with France's industrial lag, invest massively in innovative technologies and support the ecological transition. With a budget of 54 billion euros, it represents a powerful lever for transformation.

👉 Conditionality via the BEGES is therefore actionable and generalizable for all Bpifrance support.

How?

• Make the granting of the CIR and Bpifrance subsidies, particularly under the France 2030 plan, conditional on companies with over 500 employees complying with the obligation to publish an assessment of their greenhouse gas emissions (BEGES) and an emissions reduction trajectory.

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